Upheld: irresponsible lending - inadequate affordability checks complaint against Santander UK Plc
Financial Ombudsman decision DRN-6366443 of 2026-06-09T00:00:00+00:00. irresponsible lending - inadequate affordability checks complaint against Santander UK Plc. Outcome: Upheld.
Decision detail
| Reference | DRN-6366443 |
|---|---|
| Decision date | 2026-06-09T00:00:00+00:00 |
| Firm | Santander UK Plc |
| Product | Credit card |
| Claim type | irresponsible lending - inadequate affordability checks |
| Outcome | Upheld |
| Remedy | Santander must: (a) rework the account removing all interest, fees, charges and insurances applied; (b) if a credit balance results, refund it to Mr G with simple interest at Bank of England base rate plus 1% per year calculated on a time-weighted basis, and remove all adverse credit file information; (c) if an outstanding balance remains, arrange an affordable repayment plan with Mr G and remove adverse credit file information once cleared. Tax will be deducted from any interest award as required by HMRC. |
Summary
Mr G complained that Santander irresponsibly approved a £5,800 credit card in August 2025 despite his high existing debt levels and gambling addiction. Santander's affordability checks found £266 monthly disposable income, but the ombudsman found these checks were inadequate as they relied on estimated expenses and failed to verify income or investigate significant discrepancies between Mr G's declared credit commitments (2 cards) and actual commitments (11 cards with £28,450 available limit). Using verified income of £2,531 and actual expenses from bank statements, Mr G would have had a monthly shortfall of at least £81, making the lending unaffordable. The ombudsman upheld the complaint and ordered Santander to remove all interest and charges, refund any credit balance with interest, and either arrange an affordable repayment plan or remove adverse credit file information.
The Ombudsman's reasoning
The ombudsman found that Santander's checks were not reasonable and proportionate because they relied on estimated living expenses rather than asking Mr G about his actual expenses, and failed to verify his income. The significant discrepancies between Mr G's declared credit commitments (2 cards) and actual commitments (11 cards) should have prompted further investigation. When proper checks are applied using actual bank statement data and verified income, Mr G would have had a net monthly shortfall of at least £81, making the lending unaffordable and unsustainable. The ombudsman concluded that Santander should not have approved the credit given these circumstances.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Santander UK Plc, all decisions | 14,413 | 22% |
| Credit card, all decisions | 25,211 | 22% |
Source
Read the original decision on the Financial Ombudsman Service website